Enterprise Resource Planning and Customer Relationship Management

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Enterprise Resource Planning and Customer Relationship Management Industrial Management & Data Systems Enterprise resource planning and customer relationship management value Pedro Ruivo, Tiago Oliveira, André Mestre, Article information: To cite this document: Pedro Ruivo, Tiago Oliveira, André Mestre, (2017) "Enterprise resource planning and customer relationship management value", Industrial Management & Data Systems, Vol. 117 Issue: 8, pp.1612-1631, https://doi.org/10.1108/IMDS-08-2016-0340 Permanent link to this document: https://doi.org/10.1108/IMDS-08-2016-0340 Downloaded on: 05 September 2017, At: 17:23 (PT) References: this document contains references to 97 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 5 times since 2017* Access to this document was granted through an Emerald subscription provided by emerald- srm:425905 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com Downloaded by UNIVERSITY OF ADELAIDE At 17:23 05 September 2017 (PT) Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download. The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/0263-5577.htm IMDS 117,8 Enterprise resource planning and customer relationship management value 1612 Pedro Ruivo, Tiago Oliveira and André Mestre NOVA IMS, Universidade Nova de Lisboa, Lisbon, Portugal Received 23 August 2016 Revised 13 December 2016 Accepted 21 January 2017 Abstract Purpose – The purpose of this paper is to develop and test a theoretical model to measure the impact of enterprise resource planning (ERP) and customer relationship management (CRM) systems and moderating relationships of system and process integration on business value. Design/methodology/approach – ERP and CRM systems are analysed with the resource-based view theory and measured by their impact on business value, having in consideration the moderation of system and process integration. The model was tested and analysed with data collected by Microsoft, from firms that have adopted both ERP and CRM systems in their organisation. Findings – ERP system is found to be an important asset to business value, but CRM systems’ impact on business value is found to be not significant. System integration as moderator of ERP or CRM system is found to be not significant but has a positive and significant impact on business value. For process integration, the study finds that it is significant only when moderating the CRM system variable. Research limitations/implications – The model shows that the moderating effects of system and process integration are important variables for understanding the joint business value of ERP and CRM. Practical implications – Adopting an ERP system and ensuring system integration provides a direct impact on business value. In order for a CRM system to have a positive impact on business value, process integration with ERP system must be ensured. Originality/value – This study provides new knowledge on how ERP and CRM systems used together may positively influence value from IT investments, and how systems integration and process integration provide business value. Keywords CRM, ERP, Value, Process integration, System integration Paper type Research paper 1. Introduction Enterprise resource planning (ERP) systems have been applied by many firms of varying size around the world as a key part of their organisational architecture. ERP systems support day-to-day business operations and decision-making processes (Gattiker and Goodhue, 2005; May et al., 2013), and are expected to provide seamless integration of processes across functional areas (Mabert et al., 2003). However, these IT resources streamline and integrate internal business processes to improve efficiency only within a Downloaded by UNIVERSITY OF ADELAIDE At 17:23 05 September 2017 (PT) firm’s boundaries (Davenport, 1998). Customer relationship management (CRM) systems have exploded on the enterprise space in recent years, and some studies claim that they are the ultimate solution to the information exchange problem among firms (Gartner, 2013; Extraprise, 2008; Chang et al., 2014). CRM extends the original value proposition of ERP, allowing firms to build interactive relationships with their customers and bring together their previously separated information at very low cost (Payne and Frow, 2006; Iriana and Buttle, 2006). Research states that CRM systems encompass the external part of the extended enterprise, and ERP encompasses the internal part (Gartner, 2013; Extraprise, 2008; Alshawi et al., 2011). That is, while CRM applications extract customer information from customer facing Industrial Management & Data Systems processes, ERP applications leverage the information to configure product offerings, Vol. 117 No. 8, 2017 pp. 1612-1631 scheduling, and fulfilment processes (Hitt et al., 2002). As more firms realise that they need to © Emerald Publishing Limited know their customers very profoundly in order to compete or survive, integrating CRM with 0263-5577 DOI 10.1108/IMDS-08-2016-0340 ERP becomes a critical topic (Payne and Frow, 2005; Ryals, 2005). Integrated CRM and ERP systems automatically communicate customer and process-related information to each other ERP and CRM (Rai et al., 2006), increase interdepartmental connectedness, facilitate the dissemination of value market intelligence amongst multiple departments and locations, and improve the entire organisation’s responsiveness to consumer demands (Liu et al.,2013). Moreover, some researchers suggest that IT value is better captured when taking into consideration moderator relationships on the link between IT resources and business value (Liu et al., 2013; Mishra and Agarwal, 2010). Although few, some IS researchers have 1613 identified ERP and CRM integration as one of the most important fields for future IT value research (King and Burgess, 2008; Alshawi et al., 2011; Davenport, 1998; Kim et al., 2015; Willis and Willis-Brown, 2002; Liu et al., 2013; Melville et al., 2004) and claim that system integration is a key factor that shapes how IT is applied to digitise business processes and generate value. Some researchers point out that business process integration plays an important role for return on investment on improvements in both ERP (Roh and Hong, 2015; Narayanan et al., 2011; Samaranayake, 2009) and CRM (Osarenkhoe and Bennani, 2007; Light, 2003; Nguyen and Mutum, 2012; Liu et al., 2013). Motivated by these issues, this study develops and tests a theoretical model grounded in a well-established IS theory, resource-based view (RBV). We investigate the impact of the joint ERP and CRM systems value by taking into consideration the moderating relationships of system and process integration. In doing so, we contribute to the IT value literature by examining the complementarity value of the integration of these two resources. Our work focusses on answering the following research questions: RQ1. Are ERP and CRM systems drivers of business value? RQ2. Are systems and processes integration drivers of business value? RQ3. Do systems and processes integration work as moderators of ERP and CRM systems in business value creation? The remainder of the paper is organised as follows. In Section 2, we provide a literature review on ERP and CRM business value, followed by an overview of RBV theory of the firm that underpins our research model. In Section 3, we present the proposed research model and hypotheses. In Section 4, we explain the research methodology and operationalise the variables. Section 5 has the results and analysis. In Section 6, we discuss the results, present the managerial implications, contributions, limitations, and directions for future work. In the last section we present the concluding remarks. 2. Literature review Downloaded by UNIVERSITY OF ADELAIDE At 17:23 05 September 2017 (PT) The purpose of this section is to position our literature review with regard to existing knowledge about the ERP and CRM value. More precisely, we first review the three streams of published studies that build our knowledge: the ERP business value, the CRM business value, and the role of systems and process integration on business value. Then we set the RBV theory of the firm as the theoretical framework for linking the ERP and CRM to business value. 2.1 The ERP business value In reviewing ERP studies, we were able to find seven literature review publications: Esteves and Pastor (2001) analysed 189 papers, Shehab et al. (2004) analysed 76, Botta-Genoulaz et al. (2005) analysed 80, Cumbie et al. (2005) analysed 49, Esteves and Bohórquez (2007) analysed 640, Schlichter and Kraemmergaard (2010) analysed 885, and Huang and Yasuda (2016) analysed 86 papers. These studies reveal the rich
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